UK unemployment falls by 36,000 to 2.46 million

'It's a step in the right direction' says the employment minister, Chris Grayling.

In the three months leading to the end of March, UK unemployment fell by 36,000 to 2.46 million, the second quarterly drop in a row.  The Office for National Statistics says that the UK unemployment rate now stands at 7.7%.

However there is still a huge rate of youth unemployment which still stands at 20%. More and more young people are leaving education with no jobs. Graduate unemployment has doubled to 20% since the recession began. Meaning more people are leaving university with no job prospects.

Even though there has been a fall in unemployment, the number of people claming Job seekers allowance has actually risen by 12,400 to 1.47 million. The employment minister, Chris Grayling says that this is due to people being moved of other unemployment benefits such as Income support and Incapacity benefits on to Job seekers allowance. Of the 12,400 extra people claiming the Jobseeker's Allowance, 9,300 were women, the highest figure since October 1996. The number of male claimants rose for the first time since January.

Some analysts warned that despite the fall in unemployment, the number of people out of work was likely to rise again in the coming months, largely due to government spending cuts.

"We suspect that likely below-trend growth will mean that the private sector will be unable to fully compensate for the increasing job losses in the public sector that will result from the fiscal squeeze that is now really kicking in," said Howard Archer at IHS Global Insight.

He said he expected 2.67 million people to be out of work by the end of this year, with the unemployment rate rising to 8.4%.

The government argues that the spending cuts are necessary to reduce the budget deficit and to restore international confidence in the UK economy. Although critics say that the cuts could jeopardise the UK's fragile recovery.